Saturday, March 22, 2014

The contraband cigarette circus continues with governments unwilling to try new ways to stop it despite so much evidence that increased taxes
and enforcement have not been especially effective.

The federal government recently increased its tobacco taxes $4
a carton and has given the RCMP another $91 million for high-tech electronic
surveillance along the Ontario-Quebec-U.S. borders. A carton of 200 taxed cigarettes
now ranges from roughly $80 to $112 depending on local taxes. 'Baggies' of
200 untaxed cigarettes can be purchased for under $10. People who smoke like the idea
of buying their cigarettes for a fraction of the retail store cost, even if
they are illegal.

The federal government admits that the contraband problem is
not improving. It says that 30 to 50 per cent of tobacco purchased in Canada is
bought illegally. Contraband tobacco has been spreading steadily outward from Ontario-Quebec into the Atlantic and western provinces.

Governments won’t try different strategies against
contraband tobacco for two reasons: They are addicted to tobacco tax revenue ($7.5 billion in 2011),
and they fear backlash from powerful anti-smoking lobbyists such as the
Canadian Cancer Society. I have nothing against the anti-smoking lobby. They
are sincere and dedicated in their commitment to help people stop smoking. However, they are
totally grounded to the argument that higher taxes are the best way to reduce
smoking.

There is evidence that slashing tobacco taxes dramatically
reduces contraband tobacco and does not significantly increase the number of
people who smoke. Most governments and anti-smoking organizations around the world refuse to consider that argument.

The contraband tobacco issue is extremely complicated and needs fresh thinking. And, as
noted in Smoke Signals: The Native
Takeback of North America’s Tobacco Industry it cannot be fully resolved
until Canadian governments get serious about resolving Native sovereignty issues.

Dostoyevsky’s
words have become a mantra for politicians and others who consider themselves important
enough to suck up entitlements as thoroughly as a sewer vacuums. Examples of
demanding more and taking more stretch from sea to shining sea, notably in government
and politics.

There is the
Canadian Senate expense account scandal, of course, and the outrage about
Alberta Premier Aliston Redford’s air travel expenses. The Commissioner of the
Royal Canadian Mounted Police apologized and had to pay back the cost of using
on-duty RCMP officers as an honour guard for his marriage to a senior Ottawa
bureaucrat.

A fresh
example is found at the Canadian Broadcasting Corp. Its president Hubert
Lacroix has apologized for claiming $30,000 in expenses to which he
wasn’t entitled. He says it was a careless error. If you can’t figure out your
expense account, what are you doing running the CBC?

Also, it’s
been revealed that the CBC’s millionaire news reader Peter Mansbridge took big
bucks to speak to petroleum producers. The Toronto Sun said the speaking fee
was $28,000. In my journalistic world the only people you take money from are your employers. Mansbridge said it’s OK because all his paid speaking engagements
are cleared by CBC senior management, which includes the president who can’t figure
out his own expenses correctly.

We live in a
country where the elite and people in power have become so blinded by entitlement that they
have difficulty seeing the difference between right and wrong.